New Points of Decree No. 342/2026/ND-CP on Goods Trading Activities of Foreign Investors

HIGHLIGHTS ON GOODS TRADING ACTIVITIES OF FOREIGN INVESTORS UNDER DECREE 342/2026/ND-CP

1. Introduction

On September 3, 2026, the Government promulgated Decree No. 342/2026/ND-CP detailing the Commercial Law and the Law on Foreign Trade Management regarding goods trading activities and activities directly related to goods trading of foreign investors and foreign-invested economic organizations in Vietnam. These new changes directly impact the process of market entry, expansion, and maintenance of business activities of FDI enterprises in Vietnam.

In this article, MY LEGAL COUNSEL will analyze several notable highlights of Decree 342/2026/ND-CP and issues that FDI enterprises should note during their business operations once the Decree takes effect.

2. Notable changes of Decree 342/2026/ND-CP

First, the commercial agency activity has been shifted from the group of commercial intermediary services to the distribution right group. According to Points d, Clause 3, and Clauses 6, 7, 8, 9 of Article 3 of Decree 342/2026/ND-CP, the goods trading agency activity is determined to be within the distribution right group. Compared to the regulations in Decree 09/2018/ND-CP, an agency was considered a commercial intermediary. Therefore, when a foreign investor wished to implement both distribution and agency forms, they had to apply for licenses for multiple business lines because the CPC codes under the UN Provisional Central Product Classification for these two forms are different. The clear determination by Decree 342/2026/ND-CP that the goods trading agency activity is not a commercial intermediary service supply activity has helped eliminate this difficulty. Therefore, after FDI enterprises are granted a Business License to exercise distribution rights, they are inherently permitted to carry out agency activities without having to perform procedures to add it to the Business License.

Second, the expansion of the expression regarding “e-commerce” activities. In the context of robust e-commerce development, encapsulating the concept of “e-commerce services” within the term “website” according to Clause 14, Article 3 of Decree 09/2018/ND-CP is too narrow. Consequently, Point e, Clause 3, Article 3 of Decree 342/2026/ND-CP has broadened the expression of e-commerce activities by using the terms “Managing and operating intermediary e-commerce platforms, e-commerce social networks, integrated e-commerce platforms”. The use of the term “platform” instead of “website” also helps synchronize the terminology used in the 2025 Law on E-commerce and its guiding documents. Thus, new business models on mobile applications or social networks with integrated sales such as Facebook and TikTok Shop fall under the governing scope of the Decree.

Third, the authority to issue Business Licenses and Licenses for establishment of retail outlets belongs to the provincial People’s Committees. The transfer of authority to localities is a turning point in efforts to simplify administrative procedures and align state management activities with reality. Specifically, Clauses 1 and 2, Article 8 of Decree 342/2026/ND-CP have transferred the authority to issue Business Licenses and Licenses for establishment of retail outlets from the Ministry of Industry and Trade to provincial People’s Committees. Thus, FDI enterprises will only need to work with local management agencies where their headquarters or retail outlets are located, rather than central agencies as before. Delegating authority to localities ensures licensing decisions are practical and synchronized with the development strategies of each province/city.

Furthermore, instead of consulting the Ministry of Industry and Trade when issuing licenses, under the new Decree, the licensing authority transitions to consulting the Ministry of Public Security and the Ministry of National Defense pursuant to Clause 3, Article 8 of Decree 342/2026/ND-CP. This shift implies that the rapid development of e-commerce platforms and social networks integrating sales constitutes not merely online markets, but also channels for collecting and disseminating personal data, affecting non-traditional security.

Fourth, relaxing the conditions for issuing Business Licenses and increasing the continuity of compliance obligations. For investors from countries and territories having market access commitments with Vietnam, Decree 342/2026/ND-CP abolishes the requirement to have a financial plan to carry out the activities requesting a Business License under Clause 1, Article 9 of Decree 09/2018/ND-CP. However, Decree 342/2026/ND-CP supplements the requirement that investors must satisfy market access conditions “throughout the business operation process” (Clause 1, Article 9, Decree 342/2026/ND-CP), thereby shifting the focus from meeting conditions at the time of licensing to maintaining compliance throughout operations.

For investors from countries and territories without market access commitments, Decree 342/2026/ND-CP further significantly narrows evaluation criteria by eliminating requirements regarding the ability to create domestic jobs and the capability and level of contribution to the state budget, which were originally stipulated in Clause 2, Article 9 of Decree 09/2018/ND-CP. Removing these criteria reduces qualitative evaluation factors, thereby easing barriers during the licensing review process.

Fifth, allowing retail outlets to continue operating during the licensing procedure. A breakthrough difference in Decree 342/2026/ND-CP compared to the old regulation is the addition of a transitional mechanism, permitting economic organizations, after receiving foreign investment capital, to continue maintaining retail operations at existing facilities for a maximum of 12 months while undergoing licensing procedures. This transitional provision ensures business continuity, protects enterprises from the risk of supply chain disruption, maintains stability in relationships with customers, partners, and employees, and fulfills commercial obligations without having to temporarily close to perform administrative procedures.

Sixth, Economic Needs Test (ENT) exemption if international treaties contain abolishment commitments, and ENT evaluation criteria are reduced to 4. In addition to mandatory ENT cases in Decree 09/2018/ND-CP, Decree 342/2026/ND-CP abolishes ENT application for investors from countries and territories participating in international treaties of which Vietnam is a member that contain ENT abolishment commitments (e.g., CPTPP/EVFTA investors) when establishing the first retail outlet. Moreover, the regulations on ENT exemption exceptions have added the “supermarket” type. Adding this exception expands opportunities for foreign retailers to enter the Vietnamese market more easily.

For non-exempt cases, the new regulations adjust to practical scopes. One, retail outlets with an area under 5,000 m2 will be evaluated at the commune/ward or equivalent level; those with an area of 5,000 m2 or more will be evaluated at the provincial/centrally-run city level. Two, assessing the impact on market stability, existing retail outlets, and traditional markets in the geographic market area, and the retail outlet’s capacity to affirm the necessity of its establishment. Three, evaluating the retail outlet’s potential contribution to the socio-economic development of the affected geographic market area, specifically: (1) Assessing the contribution to the development and modernization of the retail sector in the geographic market area; (2) Improving living conditions of residents in the geographic market area. Four, checking the retail outlet’s conformity with requirements for ensuring: security, order, and social safety in the geographic market area; border, island, and military zone security.

Seventh, changing the periodic reporting regime of foreign investors and foreign-invested economic organizations to twice a year. While previously, foreign-invested economic organizations only submitted reports once a year with a relatively relaxed deadline of January 31, the new regulation compels enterprises to implement a periodic reporting regime every 6 months and annually, before January 15 and July 15. Notably, the new Decree completely introduces regulations on the data cut-off period for periodic reports: from January 1 to December 31 for annual reports, and from January 1 to June 30 for the semi-annual report. This helps eliminate discrepancies and provides state agencies with accurate data for inspection and examination purposes.

Eighth, grounds for revocation of Business Licenses and Licenses for establishment of retail outlets are innovated, establishing a mechanism to protect the legitimate interests of enterprises. The license revocation provisions in Article 42 of Decree 342/2026/ND-CP are groundbreaking as they simultaneously tighten post-inspection and flexibly protect the legitimate rights of enterprises. Specifically, the Decree adds a revocation penalty for 3 administrative violations regarding the License for establishment of retail outlets, and 3 consecutive violations regarding the Business License within 12 months, to enforce continuous compliance, while excluding liability in force majeure events. Furthermore, the violation handling process becomes more transparent and cost-effective by allowing enterprises to provide written explanations within 14 working days. Notably, competent authorities will only cancel falsified information on the License content and reserve the prior valid status, shielding enterprises from the risk of paralyzing all legal business operations.

3. Impacts of changes in Decree 342/2026/ND-CP on FDI enterprises

Decree 342/2026/ND-CP not only alters administrative procedures but also reflects the state management mindset on goods trading activities of FDI enterprises in the new era, specifically:

First, Decree 342/2026/ND-CP helps eliminate market entry barriers for FDI enterprises. Specifically, Articles 8 and 9 fully decentralize licensing authority to provincial People’s Committees and abolish many qualitative conditions for licensing. Besides, Point c, Clause 6, Article 5 allowing retail outlets to continue operations for up to 12 months after domestic enterprises receive foreign capital is a breakthrough highlight. These changes help limit business interruption risks, save FDI enterprises time and effort in performing administrative procedures, and are thereby expected to trigger a strong M&A wave in Vietnam’s retail market.

Second, Decree 342/2026/ND-CP shapes technology investment strategies by focusing on national security and data privacy. Expanding the e-commerce concept under Point e, Clause 2, Article 3 brings new business models like TikTok Shop and Facebook under official management. In particular, the mandatory requirement to obtain appraisal opinions from the Ministry of Public Security and the Ministry of National Defense shows that market entry barriers for FDI enterprises no longer lie merely in economic criteria, but also encompass personal data protection and national security aspects. This poses a challenge for retail FDI capital on digital platforms, as these enterprises will have to thoroughly prepare documentation and security explanation plans right from the project establishment phase.

Third, Decree 342/2026/ND-CP comprehensively shifts to a “post-inspection” mechanism, requiring FDI enterprises to enhance compliance responsibilities. The relaxation in market entry conditions is traded off against strict control regulations throughout the operation process. According to Articles 38 and 42, a new challenge for FDI enterprises is a denser periodic reporting regime and especially added conditions for License revocation. Although the new regulations possess protection mechanisms for enterprises against force majeure events, foreign investors are compelled to strengthen internal risk management systems, maintain continuous business conditions, and ensure compliance responsibilities.

4. Conclusion

Overall, Decree 342/2026/ND-CP marks a strategic transformation in FDI capital management mindset based on the principle of economic openness while tightening security. While administrative procedures are decentralized locally, ENT procedures are abolished for investors signing new-generation FTAs, and transitional provisions are added to ensure continuity for M&A deals, national security and personal data protection issues are tightened. Therefore, to simultaneously leverage the advantages brought by the new regulations and ensure legal compliance, foreign investors and FDI enterprises must proactively monitor detailed guiding regulations from relevant agencies and establish a strict legal compliance monitoring mechanism throughout their operations.

✒️ Pham Nguyen Huyen Tran, Phan Kim Hoang, Pham Quynh Nhi – Legal Interns

Disclaimer: All information in this article is provided for informational purposes only, does not constitute formal legal advice, and is subject to change. MY LEGAL COUNSEL is not responsible for the accuracy or updates of the content or external links. Clients are advised to consult experts before making any legal decisions.